SMU HR Price MoMo Index Jumps with Higher Prices

MoMo was measured at 15.07 percent this week, meaning that the current HRC price is higher than the average price over the last 12 weeks.

The last time our MoMo index was this high was the week of February 15, 2011 when the index was +16.02 percent and the hot rolled price was $825 per ton.

The change in MoMo can be a useful indicator in depicting the severity of price movements and evaluating the directional trend for flat rolled steel prices. The week-over-week change in MoMo was +7.61 percent, following a change of +1.12 percent last week and a change of -1.30 the week before. This indicates that the hot rolled price movement is trending upwards and at a much higher rate than the previous week.

To get a wider sense of the change in the MoMo Index and eliminate weekly fluctuations, we calculate a 3-week average change. The 3-week average change in the MoMo Index is +2.47 percent, following a change of +0.28 percent the week before. This shows that the movement in hot rolled prices is accelerating and at a greater pace that the previous 3-week period.

The graph below demonstrates the relationship between the SMU hot rolled coil price, the SMU Price MoMo Index, and the three week moving average change in the MoMo Index. As published in our Tuesday evening issue, the SMU HRC price range for this week is $480-$500 per ton with an average price of $490, up $40 from last week.